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ABC News
ABC News
National
Indonesia correspondent Anne Barker and Mitchell Woolnough in Kalimantan

Can you really construct a new megacity in a jungle and convince millions to move there?

Jikram says the compensation he was offered for his land was inadequate. (ABC News: Mitchell Woolnough)

With construction already underway, Indonesia's new capital city is being touted as a futuristic metropolis in the rainforests of Borneo.

Nestled in the country's East Kalimantan province, the massive project has been years in the making and is slowly taking shape.

The move will be one of the defining acts of Joko Widodo's presidency and has been put forward as a solution to Jakarta's desperate overcrowding, traffic congestion and pollution problem.

There's just one catch: it isn't easy to get to.

Known as Nusantara — after the Indonesian word for 'archipelago' — the new city doesn't show up on Google Maps, and the closest airport at Balikpapan is almost 100 kilometres away by road.

Travelling there from Jakarta involves a two-hour flight, followed by a two-hour drive along a rough highway and a series of windy, hilly roads.

By June next year, Joko Widodo will sign a decree declaring Nusantara the new capital of Indonesia.

Clearing land on the Indonesia side of Borneo.

A separate decree will revoke Jakarta's status as the capital, effectively for the first time in more than four centuries if you include the roughly 350 years it was known as Batavia, under Dutch colonial rule.

If all goes to plan, the hope is up to 60,000 people will move from Jakarta to live and work in Nusantara by 2025.

But encouraging thousands of residents to up and move to a new city that is still being built in just a few short years has raised eyebrows.

And the challenge and logistics of meeting that deadline are daunting. 

From rugged jungle to megacity

East Kalimantan is one of Indonesia’s most sparsely populated provinces, and unlike the island of Java, is geologically stable and relatively untouched.

Most of the 256,000 hectares of land set aside for the new capital is undeveloped.

As far as the eye can see it's a blanket of non-native eucalyptus forest, planted to produce pulp and paper.

Land is being cleared to make way for the Indonesia capital in East Kalimantan on the Indonesian part of Borneo. (ABC News: Phil Hemingway )

Eventually they'll be ripped out and replaced by native trees, with plans to preserve 65 per cent of the new capital city as forest and 10 per cent as parkland.

Already about 7,000 construction workers, using bulldozers and cranes, are madly transforming swathes of cleared land to build new roads, infrastructure and buildings.

The government says Nusantara will be a carbon-neutral city by 2030, with the forest acting as a carbon sink and clean energy used to fuel local transport and power.

However, the government's ambitious capital project has no shortage of critics.

Environment groups say a new city housing two million people will put a strain on water resources and food supplies.

They argue Nusantara will inevitably encroach on the habitat of native animals, including Borneo's unique sun bear and the endangered orangutan.

Others are sceptical the capital will ever attract the funding needed, or people willing to move to Kalimantan.

How do you lure millions to move to a new capital?

Among the new buildings being built are government offices, the presidential palace and accommodation for civil servants and security forces, who will be among the first to move from Jakarta next year.

Government staff will make up the bulk of the 60,000 residents expected to settle in the new city by 2024.

After that, the hope is more people will make the move organically, not just from Jakarta but from anywhere in the country.

"We'd love to see that the city is not only liveable but also loveable," says Pak Bambang Susantono, chairman of Indonesia's National Capital Authority, or IKN.

"So that it becomes a vibrant city, not only a government city."

Jakarta will still remain a megacity, but the government is hoping that by relocating the capital to Kalimantan, it can stimulate new investment and high-tech industries in a less developed area outside the most populated island of Java.

Jakarta is one of the world's fastest sinking cities. (ABC News: Phil Hemingway)

The Indonesian government last week offered a package of incentives to lure high-tech companies to invest in the new capital.

The offer included corporate tax exemptions, tax cuts for foreign companies who relocate to Nusantara, and a range of other concessions.

But Rizal Ramli, a former minister under both Joko Widodo and former president Abdurrahman Wahid, says the key to moving a capital is to locate the new city no more than three hours' drive from the original.

"[Jakarta] does need to move to separate the business part of the city and the government part of the city, but you cannot move too far," he said.

He's also sceptical the city will ever be completed.

"Indonesia will not move to that place, come on. It's taken Balikpapan [the closest city to the new capital] more than 15 years to be what it is like now," he said.

The $32-billion price tag

Along with the difficulties of moving Indonesia's capital hours away, Mr Ramli predicts a new president will face pressure to prioritise economic issues above plans for a new city.

It's uncertain whether Joko Widodo's successor will continue to support the capital's relocation, with elections for a new president due in February.

Indonesia's parliament passed a law early last year to lock in the capital's relocation, but critics say laws can easily change, so it is no guarantee the project will run to completion.

With a $US32 billion price tag, the government may also have a hard time selling it to voters.

"Public pressure will be huge. After the new government, whoever is the president, [will] have to listen to public demand," Mr Ramli said.

"Fix the economy first. So many people are so poor after the crisis. Do your work first. Don't waste your time in this capital of Nusantara."

But the capital authority's chair, Bambang Susantono, has dismissed doubts about the project.

"I think that the investors would love to see that the government [moves its offices] first right," he said.

"So that's why most of the buildings, facilities in 2024 are being built by the state budget. They have to create market confidence right.

"But after that … I believe there will be a lot of investors that will come."

The Indonesia government remains optimistic that 80 per cent of the cost – say $US25 billion – will come from private investors.

In reality, the bulk of that funding is still far from certain.

Last year, a major investor, Japan's Softbank, pulled out of the project, forcing Indonesia to look for funds elsewhere.

The Indonesian government and Lower House have agreed on a new capital city called Nusantara in East Kalimantan. (ABC News: Mitchell Woolnough)

"We are in the middle of dealing and also discussing with the private sector, we have received more than 100 letters of interest," Mr Susantono says.

"Of course, some of them are serious for the first next couple of years, some of them are still wait-and-see. But safe to say that the appetite is there."

'Our river was shut off'

The capital city project has also been marred by claims that indigenous groups who've lived in the area for generations, could be forced to leave their homes.

At Sepaku Lama village, north-east of the Nusantara site, dozens of residents from the indigenous Balik community, have had part of their land forcibly acquired to build a huge new dam, that will supply water to the new capital.

Jikram, who like many Indonesians has one name, says the dam wall – around three metres high – has sliced 250 square metres from his land.

He used to grow rice, and catch fish in the river, but now it is behind the wall.

Jikram says the megacity project has impacted his ability to cultivate from the land. (ABC News: Mitchell Woolnough)

In front of the fence there is now a deep trench that he says floods regularly and presents a danger to his small grandchildren.

He says the compensation he was offered for the land – equal to about $6,000 – was inadequate.

"I've lost income. Our river was shut off and I can no longer find fish. This used to be a river right here," he says pointing to the trench.

"But that dam closed the river down."

Mr Susantono says the capital authority is still in talks with villagers and hopes to persuade them of the benefits of the new city being built.

Despite the critics, President Joko Widodo appears determined to install Nusantara as the capital city before he leaves office next year.

Even if his successor opposes the plan, it will be late next year before the new president is sworn in — well after the city's inauguration.

By then, the legalities of switching the capital from Jakarta to Nusantara will be signed and sealed, making it much harder to reverse.

Construction is still underway on the new capital city. (ABC News: Mitchell Woolnough)
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